BA to purchase BMI

Discussion in 'Other Public Transport' started by trentside, 4 Nov 2011.

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  1. trentside

    trentside Established Member Senior Fares Advisor

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  3. bb21

    bb21 Moderator Staff Member Moderator

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    More landing slots to BA? Oh dear. Where's the Competition Commission when you need them?
     
  4. Schnellzug

    Schnellzug Established Member

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    yes, like I said over in NR General Discussion on this topic, it does seem curious how the Competion people seem quite happy to nod this kind of thing through, when they frown very strongly on, for instance, Bus companies co-operating in any way, shape or form. Perhaps it's because these giant businesses are so powerful that they have more influence than Government commissions do.
     
  5. WatcherZero

    WatcherZero Established Member

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    They take into account the finances of the involved, two highly profitable bus firms merging would be bad, two heavily loss making airlines merging would be good.
     
  6. trentside

    trentside Established Member Senior Fares Advisor

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    I didn't have much time to comment when I posted this earlier.

    I very much doubt that British Airways will be interested in maintaining BMIs operations in their present form. In my opinion, they always seemed to have a strange business, not targeting specific markets or types of route - they had something of a mis-mash that never really seemed to turn any form of profit. Reports I've read also suggest the quality of service onboard BMI left a great deal to be desired.

    Apparently the BMI Regional operation has been sold separately to a business consortium and will apparently continue to operate independently.

    I'd hope that British Airways will maintain the BMIbaby subsidiary, which has a large presence and good fares from East Midlands Airport, but I doubt this. Sadly, I think this will only serve to increase the dominance of Ryanair (especially since EasyJet pulled out of EMA).
     
  7. lookingforit35

    lookingforit35 Member

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    Bit of thread drift over on NR General discussion, but enjoyable nonetheless! My last suggestion:

    Maybe this is BA's chance to retire their somewhat elderly Gatwick 737 fleet, replacing them with BMI's Airbuses once the shorthaul routes are thinned out.

    Loads of great memories of frequent flights from Gatwick, but having returned there a few weeks ago nothing whatsoever has changed with the 737s, except they look even more tired.

    And why do BA paint a black circle around the nose cone, similar to their former 757 fleet??
     
  8. WestCoast

    WestCoast Established Member

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    BA buying bmi is not the competition disaster that some of you think. Apart from the domestic routes, there wasn't much overlap really. Bmi has tended to avoid BA in more recent years and has done a lot of flying on behalf of Lufthansa and its subsidiaries (Swiss, Brussels Airlines, Austrian Airlines, Lufthansa Italia). These routes will return to those airlines.

    Lufthansa signed an agreement over 10 years ago which compelled them to buy bmi at a future date. Bmi was a very different airline back then and Lufthansa didn't want to buy the airline in 2008/9, but it had to. They haven't been able to turn the airline around in the midst of a recession and the future looked very bleak for bmi. Bmi lost its way a number of years ago, it failed at so many things (e.g USA routes from Manchester, India from Heathrow e.t.c) and changed routes and strategies constantly. The core of its business is now the Middle East from Heathrow, which has performed horrendously with the recent 'Arab spring'. Bmi was even suffering on its 'bread and butter' domestic routes, some flights were downgraded to 50 seater aircraft (from 140 seaters).

    Lufthansa can't let bmi ruin their performance any longer. I reckon much of bmi's staff will transfer to BA, of course, there will be losses, but it's FAR better than shutting down bmi.

    It's reported that bmi Regional was the strongest part of bmi and that a Scottish investment duo will buy that part of the business.

    BmiBaby, who knows? BA won't be interested in the routes or the old 737s, they don't like low cost carriers full stop. They failed with their own LCC 'GO Fly' and they seem to be marketing themselves against Ryanair and easyJet nowadays. Personally, I think they will either be shut down or 'sold' to fellow low cost airline Jet2 (who have a base at home airport EMA).
     
  9. lookingforit35

    lookingforit35 Member

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    Wise words.

    Oddly, I wont particularly miss BMI on balance. Other than Belfast City which is a great route which BMI have made their own, I usually favour BA as they give everyone a free breakfast. Shouldn't be a deal breaker, but it just saves time and effort early in the morning.
    --- old post above --- --- new post below ---
    Who gets Donington Hall?
     
  10. trentside

    trentside Established Member Senior Fares Advisor

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    I remember reading about this at the time, apparently it worked out very well for Sir Michael Bishop (former owner of BMI) with him essentially offloading his sinking ship to Lufthansa. I seem to remember there was speculation almost immediately that they were looking to dispose of BMI, with Virgin Atlantic being touted as the most likely suitor - and the recent developments show that VS were indeed interested, though the main interest were the slots at Heathrow. Essentially, the same reason British Airways were interested.

    As I understand it, slots held by BA at Heathrow now stand at just over 50%, up from around 45%.
     
  11. WestCoast

    WestCoast Established Member

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    Lufthansa has 55% of the slots in Frankfurt, Air France has 59% at Paris CDG, KLM has 57% at Amsterdam. So it's a pretty standard figure for the 'home carrier'.

    Heathrow is 100% full and that is the problem for BA, they are massively slot constrained at their home airport in a way that competitors aren't.

    Lufthansa want to focus on their core profit-making businesses, they've just got extra capacity at Frankfurt with a new runway. They've just started two new UK routes (Gatwick and Aberdeen) and I expect to see more - they will channel Star Alliance traffic away from Heathrow and through Frankfurt, Munich and Zurich (with Swiss). I predict they will have the last laugh despite the bmi failure.
     
  12. trentside

    trentside Established Member Senior Fares Advisor

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    It's just a shame the government don't seem to understand this. How on earth do they think that one of the worlds busiest airports is supposed to operate with just two runways is beyond me...

    Like you, I think that Lufthansa will have more success in the UK market without BMI. If I can connect to long-haul flights from a local airport, without having to negotiate public transport to get to Heathrow, then I will. KLM are already strong in this market, but it would be nice (as a Miles & More member) to see a stronger presence from the Star Alliance in the UK regional market.
     
  13. WestCoast

    WestCoast Established Member

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    Yes, KLM Royal 'British' Airlines ;) serve 14 UK airports and they do it very well. I am so impressed how they've made the relatively new Liverpool route work really well. They know the British regional market much better than BA and they know to succeed offering connections through Amsterdam from regional airports. A strategy that appeals to people. KLM Cityhopper employ British crews as well!

    Swiss (operated by Helventic) have just launched a Cardiff and Bristol to Zurich route, so there's another SA regional route, in addition to Lufthansa's new Gatwick and Aberdeen routes. Expect to see more.
    --- old post above --- --- new post below ---
    5% extra slots at Heathrow will assist BA. Virgin Atlantic will kick up a fuss, no doubt, although they are another airline who seem to have lost their way a bit (like bmi). They are not in terrible financial shape, but they're not doing great put it that way.
     
  14. trentside

    trentside Established Member Senior Fares Advisor

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    I remain impressed that KLM Cityhopper run successful routes from airports such as Humberside, Tees Valley and Norwich - which sustain hardly any scheduled services.

    I wasn't aware of the new Swiss routes from Cardiff and Bristol. Might have to head down that way if I can afford it, presumably operated by a Fokker? I'm certainly hoping to see more, something from East Midlands wouldn't go amiss. I get the feeling there will soon be some gaps in the market there...
    --- old post above --- --- new post below ---
    I did hear that Singapore Airlines were looking to sell their stake in Virgin Atlantic? I'm a bit out of the loop with the airline industry at the moment.
     
  15. WestCoast

    WestCoast Established Member

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    Yes, it's flying the interesting routing Cardiff-Bristol-Zürich. Helventic Fokker 100.
     
  16. Nym

    Nym Established Member

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    KLM's 'new' route to Liverpool? I thought one of speake's first routes was Amsterdam by KLM...
     
  17. WestCoast

    WestCoast Established Member

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    I believe so, but the stake is still held. What goes on at Virgin Atlantic is a bit of a bit of a mystery, they were apparently going to bid for bmi with funding from Etihad Airways.
    --- old post above --- --- new post below ---
    Restarted after many, many years. But yes you're right! :lol:

    When you consider that Liverpool Airport's other customers nowadays are easyJet, Ryanair, Flybe (one route now) and WizzAir, it does mean something.

    *You've got me on the subject of airlines now!*:D
     
    Last edited: 4 Nov 2011
  18. bb21

    bb21 Moderator Staff Member Moderator

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    It's not just the government though. The NIMBYs, the environment activists, ... the list is endless. Some people in this country seems reluctant to understand that this country needs to move forward and not just standstill.

    That's not the only issue admittedly. The location of Heathrow meant that it cannot expand freely as many of the other European hub airports can, which meant that it is even more important for us to develop capacity at other London airports, most importantly Gatwick and Stansted. Investment is also needed to enable transit between these three major airports as easy as possible. Only then will it give BA an incentive to not be so heavily Heathrow-centric.

    We also need to look at opening up new aerial routes overhead as currently I believe it is also near capacity.

    On a side note, I travel long-haul almost every year. I have never bought a ticket with BA as they always appear much more expensive than the competitors when I need to travel. I have used BA once on a connecting flight from Paris and used their check-in facilities once when I flew with Finnair. I will just say that I will never consider flying with them even if they charge the same price as Lufthansa, or Virgin Atlantic, or KLM, or many other rival airlines. The only organisation I have experienced worse attitude from the staff is Ryanair.
     
  19. Rational Plan

    Rational Plan Member

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    Which won't help them with Lufthansa as they won't want a middle eastern airline with a beach head in Europe. Plus Virgin can't absorb BMI it's much bigger than Virgin.
     
  20. Nym

    Nym Established Member

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    Have you noticed that EasyJet seem to be changing their business model to serve the more major reigonal airports, unlike ryanair that will serve the airport with the longest names.

    ie. EasyJet are expanding at Manchester and FR pulled out saying it's too expensive and that they hate Manchester Airport Group, then moved most operations from Manchester to East Midlands... (Now if you get that, you know too much)
     
  21. bb21

    bb21 Moderator Staff Member Moderator

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    AFAIK Easyjet has always flown to fairly major airports, which is the reason why I prefer them far more than FR.
     
  22. trentside

    trentside Established Member Senior Fares Advisor

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    I think that despite competing in the same sector, EasyJet and Ryanair are very different animals. I see EZY as the more customer focused of the two, while FR are still very much the cut-throat competitor, not giving a stuff about the customers because if the flights are only 99p, people are going to come back again.

    East Midlands Airport (and MAG) will no doubt be worrying about the future of BMIbaby, but I wouldn't think it will take Ryanair and Jet2 long to establish themselves on most of the BMIbaby routes (should they cease to operate - just speculation, obviously). It's certainly what happened when EZY pulled out of EMA - in fact, I think that was the catalyst for Jet2 establishing themselves there.
     
  23. WestCoast

    WestCoast Established Member

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    I get it, it's a MAG group airport :|

    Ryanair base opened yesterday at Manchester Airport! :lol: See HERE. Don't trust a word Micheal O'Leary says.
     
  24. Nym

    Nym Established Member

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    Thing is with EMA is that their bread and butter is Cargo rather than Passenger services IMO, just how much mail and freight go through that place?
    --- old post above --- --- new post below ---
    After pulling all but the dublin route and refusing to move to T2 because of the longer routes, they move to T2 and open 20 new routes?
     
  25. WestCoast

    WestCoast Established Member

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    easyJet fly some very major business routes in Europe - Madrid to Paris CDG, Gatwick to Zurich e.t.c. They are one of the many reasons why bmi has failed to make a profit.

    Yes, apparently they are even paying more this time. :lol: They play games with airports.

    To go back the original topic, I always thought the bmi brand was modern and fresh, I liked it when they referred to it as British Midland again. They seemed like they 'cared' about serving the UK rather than just Heathrow/Gatwick/London City, but I guess that doesn't make money (as BA couldn't).
     
    Last edited: 4 Nov 2011
  26. lookingforit35

    lookingforit35 Member

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    Spot on. Ryanair seem to delight in making it difficult to travel with them, whereas Easyjet acknowledge business travellers and try to build flexibility into their fare structure to accomodate this.

    I'd fly with Ryanair if I didnt depend 100% on being somewhere, but for business travel I just dont need the hassle. Not snobbery at all, just a pragmatic approach to travel.
     
  27. WestCoast

    WestCoast Established Member

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    I agree. When it comes to travel, I am not snobby at all. I have flown with Ryanair probably about 35 times over the years. I don't mind the hoops you have to jump through, but they just make it so difficult to avoid fees. This new Ryanair Prepaid MasterCard that you have to buy (to avoid the 'payment processing' fee, which is £12 per person on a return flight) is rediculous. The terms on it are awful; £6 to buy, minimum of £150 can be put on the card, fees for any other purchase e.t.c.

    People whinge about easyJet calling them rubbish e.t.c, but really they seem quite good and fair in comparison to Ryanair.;)
     
  28. Nym

    Nym Established Member

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    And tbh, it does seem that EZY have more reasonable charges for the likes of luggage than that former BA operation that is now partnered with them FlyBE, I'd expect Jet2 to become more popular with tourists thanks to baggage alowances and when bmi dissapear, and possibly bmi baby, I'd expect to see Jet2 picking up the scrapps at EMA.
     
  29. WestCoast

    WestCoast Established Member

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    Well, bmibaby recently closed their Manchester and Cardiff bases and they are planning downsizing slightly at Birmingham, to focus on the bases at East Midlands and Belfast City. Quite a few jobs have already been lost.

    If the firm is closed down, I imagine a lot of the 'leisure route passengers' and perhaps some of bmibaby's staff will transfer to Jet2, who will expand at East Midlands. Since easyJet left East Midlands, most of the 'city routes' have been operated by bmibaby. If Jet2 are feeling brave, they may take on some of these routes (e.g. Paris, Amsterdam, Geneva), like they do from Leeds/Bradford.

    Ryanair will also benefit, however unattractive they seem to certain groups, they do carry some seriously high passenger numbers and sometimes on very 'niche' routes (East Midlands to Rzeszow anyone?) for the Polish community I presume. Even with the hassle and fees, they are often still quite a bit cheaper than the competition, if you're sensible and follow their rules.

    Flybe is more of a business regional carrier and they've worked out that they can charge quite high fees for baggage and not upset too many people. Despite profit warnings, they're a healthy airline and have a future ahead of them, especially with their new venture, Flybe Nordic.
     
    Last edited: 5 Nov 2011
  30. lookingforit35

    lookingforit35 Member

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    Owned c10% by BA I believe, as part of the sale (OK, giveaway) of BA's regional business to them a few years back.
     
  31. WestCoast

    WestCoast Established Member

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    Ah yes, the major success that was BA connect.:roll:

    BA codeshare on quite a few Flybe flights, however I don't think they have many ties to BA really, since they have a strong relationship with one of BA's major rivals, Air France. Flybe codeshare with Air France on all their flights to Paris CDG to feed into Air France's mid-haul and long-haul network, which I am sure BA is thrilled about. :lol: They are minority shareholder, so influence is limited.

    Going back to bmi, I am wondering what the future holds for Virgin Atlantic, they relied on bmi to feed their flights out of Heathrow. They won't be happy having to put connecting passengers up to Manchester, Edinburgh e.t.c on BA.
     
    Last edited: 6 Nov 2011
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